Ag groups seek better service from CP

While Canadian Pacific has made improvements in its grain-shipment services, there remains concern that the carrier won’t be able to clear up its backlog, according to the U.S. Department of Agriculture.
In a letter to the Surface Transportation Board last week, the USDA also said it was worried about a “lack of transparency” when CP reports its grain shipment numbers to the board, as mandated in a June 20 order.
USDA Under Secretary Edward Avalos noted that CP has 29,650 open requests for service in the next two months, and he is concerned that the railroads slow progress in reducing its backlog means that some of these orders may go unfilled. According to CP’s weekly reports to the STB, the railroad has been moving an average of just under 2,000 cars per week.
Avalos calculated that the carrier would have to move 4,725 carloads each week in order to clear its backlog while addressing new-order commitments.
“With remaining grain in storage due to the backlog, grain elevators in some locations, such as South Dakota and Minnesota, could run out of storage capacity during the upcoming harvest, requiring grain be stored on the ground, and running the risk of spoiling,” he wrote to the board. “The projected size of the upcoming harvest creates a high potential for loss in the affected states.”
Avalos also said that out of all the Class I railroads, CP is the only carrier that hasn’t reported performance measures to the Association of American Railroads, a measure the board has requested of all railroads since the late 1990s.
“These performance measures provide transparency and insight regarding the performance of individual railroads at a broad level, and current rail service problems have highlighted the need for these measures,” he wrote. "I respectfully ask the Board to require CP report these numbers in the future.”
Last week, Roger Johnson, president of the National Farmers Union, also wrote to the STB expressing his concerns about the “substantially inadequate” capabilities of CP and BNSF to deliver grain shipments in time for the harvest season.
The NFU represents 200,000 domestic farms.
“We are especially concerned regarding wheat since harvest has already started, and grain remains in the bin from last year’s harvest,” he wrote.
In North Dakota, Johnson wrote, BNSF has reported 2,399 rail cars have been delayed an average of 23.6 days, with CP reporting an 11.71 week average for filling 22,457 open requests.
“Elevators are routinely penalized 50 cents per bushel for deliveries that are two weeks late,” he wrote. “Anecdotal evidence from four different grain elevators indicates that their oldest orders are from early March, and shuttle orders are up to 2,000 cars behind. These numbers are staggering and simply unacceptable.”
CP earned a net income of $371 million in the second quarter, a
48-percent jump, year-over-year, and its largest quarterly income result
on record.
The STB has been fielding similar letters from concerned agriculture groups, as well as state legislators, for the past few months. Lately, it has also begun getting letters from groups in support of increased energy shipments; these letters have requested that the board take a page from its requirements on agriculture shipping and make the railroads start reporting on coal shipments.